#7 SHEAMALI WICKRAMASINGHE

GROUP MANAGING DIRECTOR, Ceylon Biscuits

For many Sri Lankans, Ceylon Biscuits Limited or CBL, is synonymous with the Munchee brand, but the group now manufactures about 150 products across the food industry, exports these to over 45 countries and has recently ventured into the service industry.

CBL has tackled the challenge of sustaining growth by moving away from just biscuit production and adapting their products to consumers’ changing habits while integrating rapidly advancing technology into their manufacturing processes. The company has begun to manufacture food products that can be small meal substitutions, or even replacements for meals. “We see people’s habits changing and we have to move with that,” says CBL Group Managing Director Sheamali Wickramasinghe. “We can’t live in yesterday’s glory. We keep updating our portfolio, and I see the success.” Sheamali joined the family company about 20 years ago and worked at all levels in the company to get to her current position as Group Managing Director, facilitating the dialogue between the Chief Executives of CBL’s ten companies and the group Executive Committee. CBL has also sustained growth by regularly moving into new markets. Currently, exports account for about 15% to 20% of group turnover, with export markets ranging through Asia, Africa, Europe, North America and Australasia. Munchee holds the highest market share in biscuits in Sri Lanka at 55%, but the market is almost saturated, with about 30 to 40 small regional players accounting for a quarter of market share. Most of these small players compete on price and margins. CBL doesn’t want to compete on value alone and is instead looking at the export market for growth.

 

 

Two years ago, the group set up CBL Exports in the Seethawaka Export Processing Zone investing $10 million in a factory dedicated to manufacturing for exports its products in large volumes such as Munchee Milk Shortcake cookie and the Ginger Biscuit. The company also exports large quantities of its Cream Cracker to the US, where it is served inflight by many airlines. Since Munchee does not have a brand reputation in foreign countries and establishing one would require an extensive campaign, Munchee biscuits are usually sold under private labels, often branded with the supermarkets in which they are sold. However, Munchee is now focusing less on this business and more on building its own brand. 

In April 2014, CBL ventured into Bangladesh – where the population is over 180 million – to sell several FMCG products there. Next year, the group will also establish several factories in Myanmar, which will produce for that market and for export. The group will look at consolidating its brands in these markets and probably focus on just one or two. 

CBL invested in a subsidiary CBL Natural Foods to capitalize on the increasing awareness among western consumers of the benefits of organic food. Set up through the 2003 acquisition of Cecil Foods and exclusively focused on the export market, this company produces organic fruit and coconut products, cashews and spices, which are mainly exported to the US and Europe, where they are mostly sold in specialty shops. This awareness of healthy eating is also seeping in to Sri Lanka, the firm has observed. 

In 1968, CBL launched the Munchee brand after the Group Chairman Mineka Wickramasinghe developed and presented a nutritional protein-rich biscuit to the Ministry of Education to replace the bun and glass of milk mid-day meal the government was providing school children with the support of CARE International. Munchee still has a range of nutritional biscuits, including crackers made of mixes like kurakkan, karapincha, Kothalahimbutu which all have some light medicinal properties. Munchee developed this cracker with the Industrial Technology Institute of Sri Lanka and is now working with a few universities to conduct clinical trials on the crackers’ effect on a consumer’s glycemic index to educate consumers. Healthy eating isn’t a widely practiced trend in Sri Lanka and the number of patients with non-communicable diseases is growing. The cereal Samaposha is also a nutritious product offered by CBL and is manufactured using all local raw materials, corn, rice, soya and green gram. 

At the same time, as Sri Lanka develops and consumers expect more quality in what they buy, companies need to integrate advanced technology into their manufacturing processes. CBL has invested $20 million in a range of food products to be launched next year, which will integrate new technology and be geared at today’s time-strapped consumer. “In Sri Lanka, Munchee is an everyday person’s food, so we try to keep the price affordable,” says Sheamali. Munchee also has premium products and, in export markets, the company pitches these at a higher price point.

CBL is also gradually increasing its backward integration, working directly with farmers to ensure the standards of raw materials. While the group began this process to ensure the quality of their products, there is also an element of altruism in uplifting Sri Lanka farmers. CBL Agro works with about 7,000 farmers to source raw material for production directly When CBL started sourcing peanuts locally, they found the quality varied and was generally unacceptable. If peanuts are not grown and stored properly, they develop a fungus that has toxic substances. CBL worked closely with a group of farmers to show them how to properly grow and store peanuts, testing all produce for toxins. Now the group sources all their peanuts locally, and even some peers buy CBL’s excess peanuts because they cannot find similar quality elsewhere in Sri Lanka. The group is constantly looking for ways to build an entirely local value chain. “That’s a philosophy this company was founded on and that’s what we are looking to continue,” says Sheamali. CBL’s latest venture, a move into retail, also builds on this drive to work with and uplift Sri Lankans. While modern trade is growing, many smaller shop owners lack the skills and knowledge to upgrade to and manage supermarket-style stores. CBL decided to partner with such store owners – the group does not own any of the outlets – to help them upgrade their stores and implement an efficient management system. Some of CBL’s distributors own the first outlets with which the group partnered. CBL has collective, centralized procurement so the shops can benefit from volume, but the owners essentially run their businesses. Branded under the ‘Star United’ name, there are now 40 such supermarkets, and CBL envisages increasing this to 500 outlets in the next three years. It hopes to consolidate their brands from Munchee, Ritzbury to Lanka Soy under a specially designed CBL logo to bring synergy.

“We’re feeding and nourishing the nation,” says Sheamali, “That’s where we started. That’s where we will continue. We’ve grown wider in that we now look at the entire supply chain, not just manufacturing. We’re going into how products are grown so that we have the best practices right throughout the supply chain. And that’s a legacy we have in Sri Lanka. That’s why we’re one of the few companies who’ve been able to expand into so many areas within the food industry.”